In the wake of iCloud security concerns raised by recent events, Apple stock demands lofty results for the next iPhone announcement

Adding to the drama, there could also be other possible launches such as a new smartwatch and a mobile payments service. Like Apple's stock, the expectations are soaring.

Tremendous anticipation

The hype surrounding the iPhone 6 and a rumored iWatch has been intense, and Apple shares have rallied to all-time highs when adjusted for the the stock split.

That's why Apple really needs to hit it out of the park at this week's event.

Investors and consumers are looking for something groundbreaking – a simple redesign of previous iPhones would be seen as a disappointment.

"We view much of Apple’s runup — a 32% gain in the past six months, reaching all-time highs — as driven by tremendous anticipation for these products," says Brian Colello, CPA, a Morningstar senior analyst who covers the company.

"In our view, the bar has been raised to the point where Apple has virtually no room for error."

" The recent sell off could be due to the fact that investors are booking a profit ahead of the new product launches, since the impact of the new iPhones - which will have to contend with a saturating high-end smartphone market - is possibly factored into the company's stock price, while a wearable device may not offer a very meaningful upside considering the company's already large size and market cap," Trefis analysts said in a research note.

The smartwatch business is seen as much smaller than smartphones and tablets, so some investors wonder if the iWatch will be enough to "move the needle" for Apple's bottom line even if it is a success.

Priced in

Apple stock tends to rally in the weeks and months leading up to a new iPhone, then pull back after the launch.

This time around, Apple is expected to introduce two bigger-screen iPhones with screens of 4.7 inches and 5.5 inches, according to reports.

Some analysts forecast that Apple could sell 10 million iPhone 6 units in the first week alone. The question is whether that's already "priced into" the stock.

“We think a lot of the positives are priced into the shares right now. If you look at the performance of the stock year to date, it is indicative of something more than the company has delivered thus far. Clearly there’s a fair amount of anticipation associated with Tuesday’s event and what’s going to come from that," said S&P Capital IQ analyst Scott Kessler in an Investor's Business Daily report.

Buy the rumor, sell the news

No doubt, investors will be looking for big things from the iPhone 6 and early sales to confirm the big rally in Apple stock.

Tuesday's unveiling "will have to include all of, if not more than, the widely rumored features and screen sizes, while offering no glaring omissions or room for disappointment," said Morningstar's Colello. Regarding last week's sell-off, he thinks it's reasonable for investors to begin to take profits after the surge in Apple shares, while the company "certainly appears to be a candidate for a 'buy the rumor, sell the news' type of sell-off heading into the event," the analyst added.

Aside from the iPhone 6, at Tuesday's event investors will be looking for more details on a possible iWatch, a mobile wallet, or even some other unexpected product.